Mortgage Rates Slip While Mortgage Applications Continue To Fall

By Michael Aneiro

Week after week of mixed economic data have kept Treasury bond yields bouncing up and down but staying within a well-defined longer-term range, and the same can be said for mortgage rates. The average 30-year fixed-rate mortgage rate, which tends to track the 10-year Treasury yield, fell in the week ended today to 4.29% from 4.33% a week ago, according to Freddie Mac’s (FMCC) latest weekly Primary Mortgage Market Survey. A year ago that rate averaged 3.35%. Since mid-January, the rate hasn’t fallen below 4.23% nor risen above 4.41%. The average 15-year fixed-rate mortgage rate slipped to 3.38% from 3.39% a week earlier, up from 2.56% a year ago.

A similar 30-year mortgage rate measured by the Mortgage Bankers Association’s latest weekly survey held steady at 4.49% in the latest week. The average rate for jumbo loans of more than $417,000 remains below the rate for smaller loans, falling further to 4.37% from 4.41% a week ago.

The MBA’s survey also showed mortgage applications fell by 5.9% in the latest week, while refinancings were down by 7%, continuing a longer-term downward trend.

“Both purchase and refinance application activity fell last week, and the market composite index is at its lowest level since December 2000,” said Mike Fratantoni, MBA’s chief economist, in a statement. “Purchase applications decreased 4 percent over the week, and were 21 percent lower than a year ago. Refinance activity also continued to slide despite a 30-year fixed rate that was unchanged from the previous week. The refinance index dropped 7 percent to the lowest level since 2008, continuing the declining trend that we have seen since May 2013.”